Systems vs. Performers

Timmy Chang, Graham Harrell, Colt Brennan, Dan LeFevour.  If you don’t recognize these names, you are probably not alone.  If you don’t recognize them, you probably don’t know what they have in common:  All four are in the top 15 all time in NCAA College (2^nd, 4^th, 6^th and 13^th respectively) for career passing yards by a quarterback.  All played their college football at DIV I schools and all were on an active NFL roster at one point in their career.  What they also have in common is the fact that they weren’t successful at the highest level. 

Of the thousands of college athletes that have gone into the professional football since 1963 only 287 have made it to the hall of fame.  There are many more names that can be added to that original list of players that were very successful in college, but didn’t make it to the next level.  This natural attrition is a by-product of the NFL’s ability to successful determine the performance quality of the potential incomers.  It is also determined by fit.  Some players can continue to develop based on the system they are brought into.

Not everyone is capable of improving on their own.  As a matter of fact, I would go out on a limb and estimate that over 90% of the people out there need a proactive and disciplined system around them in order to reach their potential.   Of the remaining 10%, I would go out on the same limb to say that 9-9.5% of them are more than capable of implementing strategic plans and ensuring that the other 90% follow them.  That leaves us with .5-1% of the employees that are capable of coming up with strategic plans, determining the steps that need to be made, and ensuring that the rest of them are able to comprehend and follow the tasks that are handed down.  Based on these percentages, for every 1000 employees a company may have, only five people in that group even have the potential of being performers.  Of those five, how many of them are in a position to affect change?

Now, take out the section of the employee populous that is made of entrepreneurs, self-employed, consultants (not that all consultants are in that group, but the percentages would be higher) and other high-performance based groups and those five employees may dwindle down to just one or two.

This brings up the question:  “Is it better to have a great system or have great performers?”  Now the obvious answer would be to have both.  Unfortunately, like the NFL, there is some Darwinism going on.  Not everyone coming into the business world has what it takes be a great performer.  In fact, I would hazard a guess that percentage wise, there are fewer All-Stars available in the business world than there are in the professional sports world.  If the success of your organization depends solely on the ability to draft or sign a Peyton Manning, you might be in trouble. 

Performers are those that can go anywhere and make it better.  Performers are people that are capable of reading the business and being able to come up with profitable completions non-dependent on the effective skill level of the rest of the team.  That isn’t to say that a performer can be successful alone, just that a top performer by nature makes the team better.  The downside to a top performer is that when they leave, a lot of the performance goes with it. 

Systems, if implemented correctly and led through disciplined processes create an effective team that makes all of the individual members better.  These systems are the infrastructure of a successful organization.  People inside the system are interchangeable.  This provides the ability to increase productivity, growth and engagement from everyone working within the system.  The other benefit of an effective system is the ability to accurately rate your employees.  Every day becomes that pre-season game where you can effectively ascertain your talent level.  If you know exactly what the expectation of each person is, you have a way to measure it.  When you measure it, you can see what is working and what is not.

If your business can’t be successful without the All-Star performer, you need to take a harder look at the infrastructure you have in place.  Good systems and structure give you a lot more agility and strength.  If you are lucky enough to get an All-Star performer on top of that, that’s when the discussion of dynasty can happen.

Formulating a Change Plan

There is a right way to change things and a wrong way to do it.  The right way is a series of steps and chronological patterns that lead the process to fruition.  The wrong way is not doing it.

That being said, making changes comes with the inherent risk of not coming up with the exact result you were looking for.  Even at the end of the road, if there is nothing different, going through the process of changing had the benefits of practicing the process and determining that the current way, for the time being, is an adequate path to take.

Change requires planning.  Planning for change can be a very simple process, or it can take longer and be more involved than the actual process.  There isn’t one formula for every change, so an organization needs to figure out what works for them. 

The change process begins with determining which category of change is needed.  The chart below illustrates the three different change types an organization will go through.  Once the category of the change is determined, the next steps can be formulated.

Category of Change	Recipient	Difficulty	Length of Initiative	Reversibility
First-order Change	Procedures-	Minor	Short	Reversible
Second-order Change	Policies	Moderate	Medium	Irreversible
Third-order Change	Values	Very	Long	Irreversible

 

First-order Changes – These are procedural changes and are the most common organizational changes.  Very often they can be relegated to a specific department or even a group within that department.  Procedural changes are just what it says they are, changes to a way a process within the business works.  These changes take effect when a new process is implemented, or there are published changes to an existing process.  These types of changes are relatively easy to make and usually don’t take a whole lot of time to plan, develop and implement.  The other benefit to this type of change is that they are reversible.  A new process is a living organism within an organization and has the ability to constantly evolve and improve.  An example of a first order change would be a new process for processing cash transactions within the organization.

Second-order Changes –These are policy changes and are less common than first-order changes within an organization.  Policy changes are relatively more difficult to implement as they require changes in the underlying organizational structure.  This means that some of the guiding principles of the organization require modification or in some cases deletion all together. These changes take more time to organize, implement and manage than first-order changes and once they are completed are irreversible in nature.  An example of a second-order change would be that the organization decides no longer to accept cash as a viable means of payment.

Third-order Changes – These are value changes an organization determines are necessary in order to become more efficient or effective.  Value changes are the most difficult types of changes an organization can make as they impact the core values an organization has been built upon.  Most often, these types of changes are also culture changes that will affect the organization in its entirety and involve not only every employee within the organization, but many times key vendors and customers that have been in a relationship with the corporation for a long period of time. 

Beginning the Change Process

Prior to beginning and process for change, the very first step is to establish the group of people that will be ensuring that the changes are in line with the goals of the organization, and have the ability to affect change as well as being empowered to facilitate the changes being made.  This group should be comprised of the organization’s leaders along with people designated for specific purposes such as project management or IT.  Once you have developed this group, the change can start.

1.      Identify the change you want to make

a.      Make a list of changes you believe the organization needs.

                                                              i.      Pick three or four depending on ease of change and necessity of change

1.      Trying to get two or three Third Order changes accomplished at once won’t be as effective as trying to get one of each done.

2.      Determine the Goals for that change

a.      Goals need to be specific, quantitative and attainable.

b.      Quantifying goals can include specific dates for completion, or other data points that can show progress.

c.       Find a good balance between the impossible and the painless. 

                                                              i.      Finding this balance takes practice.  If you are unsure, work backwards.  Figure out where you want to be and go to where you are to make sure you have given yourself enough time and resources to hit your goal.

3.      Determine how you will track the change/Develop metrics to manage the change

a.      When you have quantitative goals, you can develop metrics to make sure you are on track.  Before you begin, you should have a clear and easy way to make sure that you can inspect what you expect.

4.      Determine who the change will have an effect on

a.      This is an internal and external function where you will determine which people, departments as well as customers, channel partners, etc. will be affected by the change. 

b.      Make a list of everyone that will be part of the change as well as any individuals or groups that will feel the results of those changes and any of the tasks required within the change process.

5.      Build an action plan including who will be responsible for each step    

a.      Step by step action plans are important in the change process.  For each step you need to identify the following items:

                                                              i.      Specific goal for the step to include a quantitative measurement

                                                            ii.      Resources required for completing the step – people, supplies, accommodations, etc.

                                                          iii.      Definition of what the step will be – specific action items that can be completed.

                                                          iv.      Who is responsible (Specific name or title) for ensuring the particular step is completed accurately and timely

                                                            v.      Timeline for completion of the step – this should include when that step should begin and when it should be completed.

6.      Do a risk assessment for the change

a.      Once you have a list of who is involved, it is time to do what I think is one of the more important steps of the change process; a risk assessment.  Risk assessments are determining factors in change management.  If the risk of losing customers, employees, etc. is higher than the benefit of the change, you may want to either re-engineer the change or look for something different to do.

b.      Risk assessments entail looking at the opportunity costs of the change.  These costs are either the cost of the next best option or worst case scenario at each step of the change process.  Like any other financial analysis, you should determine a cost benefit to the change before blindly charging forward.

c.       That voice in the back of your head wondering if this new idea is the best is the onus behind a risk assessment.  Don’t overthink the risk and talk yourself out of the change.  Instead, use it as an opportunity to look at the process in the most objective way possible.  Look at your options and make an assertive decision:  move ahead, modify or eliminate.  Don’t go halfway because of fear.

7.      Determine a timeline for the change to take place

a.      Just like the goals, make sure that your timeline is realistic.  When coming up with timelines, the best way is to assign goals for each step and add them together to come up with your end goal.  If it is too far in the future for your comfort, you can look more closely at the individual goals and adjust.  If it is happening too fast, you may have missed a couple of steps or have goals that need to be stretched out a bit. 

b.      We all want change to happen overnight.  Unfortunately, that isn’t always going to be the case.  Establishing realistic timelines will give you an idea of how big of a change it is, and how long you will have before you realize any benefits from it.  This is a great exercise for those with a high sense of urgency working in a large or lumbering organization.

8.      Determine a communication plan for the change

a.      Now that you have formulated your change plan, you will need to develop a communication plan to ensure that your goals, timelines and specific expectations are clearly communicated to everyone involved or affected by the change that will be taking place. 

b.      Your communication plan should keep the results of your risk assessment in mind.  If you determined that one group or another has a high degree of risk in regards to turnover or dissatisfaction hitting them over the head with the change might not be in your best interest:  consider your audience. 

c.       No matter your audience, your communication plan must be assertive, concise and include three very important items:

                                                              i.      An unwavering leadership commitment to the change

                                                            ii.      Specific goals, timelines and expectations for the change

                                                          iii.      Openness to ideas, thoughts or other input to the process or any of its components.

Once you have completed these steps you will have a basic formula for change.  In order to maintain consistency and ensure future successes, your individual formula should be documented through processes, memos or other written tools so that you can replicate those things you did well, and eliminate those that didn’t work.   Now that you have the formula put together to put a change in process, you can start laying out the change itself.

Understanding the Circle of Change

Understanding the Circle of Change

 

 

 

The key part in understanding this cycle is realizing it is a circle that has no beginning and no end.  In effective organizations, change is a never ending process.  When you get to the end, you start over.  It is also cyclical in the fact that what comes around goes around.  Negative forces can force changes within an organization if they are allowed inside the circle.  Organizations that react instead of plan have the highest risk of outside forces causing a breakdown in their structure as well as their business.

A circle remain strong as long as all of the sides remain intact:  as your organization grows more effective in managing change, each of the sections of the circle become stronger.  The circle of change is designed to repel any forces that you don’t want coming in.   Keeping the circle intact is a product of asserting the will of your organization over the strength of outside forces.  Protecting your territory comes through developing consistency across all four of the areas of change and a leadership group committed to being the guardians of their realm.

Process –  Processes are a cornerstone to change.  Updating, improving or changing policies, processes and procedures are the initiation points of change.

Change comes from modifying behaviors.

Behaviors are modified by changing the way people accomplish their tasks. 

Accomplishment comes from ensuring that people reach their goals.

Goals come from a desired valuation of the effect of those changes. 

All of these come from ensuring that you have built a roadmap for people to follow.  Those roadmaps are your written documentation of what you want to do, who you want to do it, and where you want it to lead you.  Leaving out any of those steps gives an incomplete process and leads to confusion.

The process part of change comes from outlining exactly what you want your change to look like and then providing everyone involved step by step instructions on how to get to where you want to go.  If you don’t lay out a specific road map, you will spend much of your time spinning your wheels wondering why your people can’t get where you want them to be.  One of the most detrimental things you can do within the change process is to make assumptions.  Don’t assume that someone knows what you want unless you put in writing exactly what it is.  On the other side, don’t assume you know what someone wants unless you see in writing exactly what that is.  Within the change circle, all parties have the responsibility of asking for clear direction no matter how “common sense” you may believe it to be.

An effective process is a step by step map of how to accomplish a number of tasks leading to the desired end result.  The effectiveness of a process depends on having checks and balances as well as management metrics built in to judge it.  Processes are reliant on each of the steps for their continuity and overall effectiveness.  Skipping steps, adding steps or doing them out of order will render most process ineffective.  All process should be built with the ability to change or adapt to the business environment.  The people involved with controlling the process should be the only ones allowed to change it. 

 

People – Getting the people responsible for the work to be on board with the changes can seem like a Herculean task at times.  Change is about changing the mentality of the people from why are we changing to what else can we change.  The key to getting people to sign off on the change process comes from support.  The support they need has two major components: Buy-In and Structure.  Buy-in starts at the top and works its way down.  When anyone from the inside or outside can see a commitment from the leadership to make changes, those people get behind it.  It isn’t so much about talking about it as it is showing through your actions that the changes are important.  Structure is the other leg of the ladder of change.  People believe in things they can see, feel and understand.  Structure is about giving them something tangible such as documented processes, data driven benchmarks, attainable goals and written statements of support and buy-in.

One of the worst things that can happen is to underestimate the people.  Because someone has never changed doesn’t mean they are unwilling or unable.  It only means they haven’t had an opportunity to do so.  Change is just as much about physical change as it is mental or psychological.  There will always be those against making changes.  If you follow the process and basic principles of change management, it will give you the opportunity to determine which of the people want to do it and which ones don’t.  Until you give them the opportunity and the support, you won’t know what you have.

 

Culture –  Culture is a direct representation of Leadership.  Employees will assimilate to the prevalent culture, so it is imperative that your culture is one of trust, empowerment and decisiveness.  The mistake many companies make when it comes to change management is believing that the culture will change because you want it to.  All changes come through effort, resilience, consistency and discipline. 

Culture change is a macro-change which involves everybody from every level.  Like any other change, it is in a constant state of evolution and needs to be tended to, reinforced and sometimes pampered.  Defining and then re-defining your cultural goals will be an integral part of any change implementation. 

Culture change is probably the hardest and most difficult to quantify of any changes an organization can make.  An effective change strategy for corporate culture has to rely on a data driven action plan.  Coming up with the data is not always an easy task.  Think about what defines your current culture.  One of the best ways to start the task is to put out a survey to your employees.  Ask them to rate certain areas of your business and culture anonymously.  When they have done that, you will have a quantitative view of your business from your employees’ perspective.  This will help lead you to some cultural change initiatives that you now have a baseline to benchmark your changes against.

 

Product –  In regards to Products when it comes to the cycle of change, the product is the sum of the other parts.  If your organization makes its living providing goods and services to a consumer base, those goods and services are only a part of the product.  The sum of the product is your company, which when it comes to change equates to the people, processes and culture.  Improving your product is the impetus for most changes.  Understanding where your product needs to be improved gives the basis for the change, and understanding how to improve it, gives the guidance for the change.  As your product is the sum of the other three parts of the circle, it is where everything starts and ends. 

Looking at your product can be an overwhelming task if you try to get everything changed at once.  Remember, the change process is a marathon, not a sprint, and there are infinite opportunities to keep the change cycle going.  Instead of trying to get everything done at once, the best way to go about changing your product is to pick pieces at a time.

Make yourself a list of what you think needs to be changed.  Rank that list from highest need to lowest need with 1 being the highest.  After you have done that, rank the same list from easiest to hardest with 1 being the easiest.  At this point you can both take an average of the two lists and focus on the lowest numbers.  Another option would be to pick the two highest and the two easiest to start.  That will give you the opportunity to work through the change process on some of the easier ones first which will give you the potential for a quick win as well as giving your organization some needed practice for the two most pressing needs you chose.